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• Structural inspection • Private Streets/Roads Mineral and Oil and Gas Rights Mandatory Disclosure A: If the seller (or seller’ broker) indicates that city Other Helpful Websites: If the home inspector reports seeing structural defects, A private street or road is one that has not been accepted Statement: A seller must deliver this form when a buyer sewer and/or water services are available, contact the • ncdot.gov/projects — for information regarding road such as foundation cracks, inadequate support in the into the State system of roads and is not State-maintained. makes an offer, https://www.ncrec.gov/Forms/Consumer/ city utilities department to confirm this, preferably in projects planned by the NC Dept. of Transportation that may crawl space or roof, moisture-related damage, or damage It may or may not have been constructed to the standards rec425.pdf. The purpose of the form is to give the seller writing. If city sewer service is not available, contact the affect the property you are interested in. Questions and Answers on: from a long-term wood-destroying insect infestation, a of the NC Department of Transportation. All responsibility an opportunity to disclose whether the mineral, oil and/ county’s environmental health department and order a • sexoffender.ncsbi.gov — to search for sex offenders near structural engineer can determine the severity of the for repairing, maintaining and clearing a private road lies or gas rights have been severed from the property. If soil evaluation test (aka a “perc” or percolation test) to the property you are interested in. problem and indicate whether repairs are needed. with the people who own land along the road. It is very the seller answers “Yes” to any question, ask for more determine whether the soil can support an onsite septic • fws.gov/endangered/map/state/NC.html — to search for DUE DILIGENCE important to have a road maintenance agreement signed information. Note that sellers have the right to make “no system for the number of bedrooms you plan to have. information regarding endangered species that could affect by all such property owners that makes clear who has representation” as to some of the statements on the form. There is no way to determine the quantity and quality of your ability to develop a piece of property. FOR the responsibility and cost of maintaining, repairing and available water on the property without drilling a well, RESIDENTIAL clearing the road (typically, all the owners). The condition Restrictive Covenants and Homeowners’ Association Bylaws: but you may ask neighbors about their water quantity Scan the code below to access the RESIDENTIAL of the road will deteriorate over time, and lenders will Obtain and review all available restrictive covenants and and quality, and whether they use water filters. Consider Commission Website from your mobile devices. BUYERS be less likely to lend money to buyers if the road is not homeowner association documents to verify that your hiring an engineering firm to perform a soil compaction BUYERS properly maintained. This can make such properties more intended use of the property will be permitted, and that test to determine if the soil can support the structure(s) difficult to sell later. The developer of a new subdivision you understand other requirements and restrictions you want to build. Also consider getting a survey, is required to give prospective buyers a subdivision street imposed in the neighborhood. These might include checking whether the property is located in a flood zone, • Moisture and Mold inspection disclosure statement indicating whether the street on things like operating a business from the home, renting and researching building restrictions relevant to the area, If there is excessive moisture and/or mold in the crawl which the lot/house is located is public or private (N.C.G.S. the home, paint colors, parking, or having animals. If a such as ridge line protections in the mountains, CAMA space or other parts of the house, a crawl space specialist § 136-102.6(f)). property is subject to a homeowners’ association (“HOA”), restrictions along the coast, and wetlands protections may be able to suggest a solution for the moisture in it is also a good idea to inquire about the HOA’s financial along waterways and low-lying areas. Make sure it has the crawl space and a mold inspector will be able to • Noise/Odors/Traffic/Land Use situation and whether anticipated expenses could lead to access from a public road or otherwise, and is not determine the type and extent of the mold, and whether If you are sensitive to noise, odors, or traffic, be sure to an assessment. “landlocked.” it is harmful to people. investigate the property’s proximity to airports, highways, fire stations, businesses, farms, and other land uses that Q: What is a “walk-through” and why is it important? • Flood Zones generate any of these. Searching public information, A: A “walk-through” inspection is your final opportunity Properties located along or near bodies of water, driving around the area, and talking to neighbors are ways before closing to go through the property to confirm waterways and low-lying areas may be located in to gather such information. that all of the repairs and services promised by the seller federally designated flood zones. If you are going have been completed and that the property is still in the to borrow money to buy property located in certain • Documents to Review: same condition it was in at the time of contract formation. flood zones, the lender may require you to buy flood Ideally, this inspection should occur after the sellers insurance. If you are not going to obtain a loan to buy Residential Property and Owners’ Association Disclosure Q: Are there special considerations for older homes? have removed all of their furniture, appliances, rugs, the property, determining whether the property is Statement: A seller must deliver this form to a buyer A: Yes, with older homes you should inquire about boxes, and other belongings to enable you to see areas THE NORTH CAROLINA located in a flood zone and the cost of flood insurance when the buyer makes an offer; https://www.ncrec.gov/ underground fuel storage tanks, lead-based paint, and of the house that may have been hidden. Ask for copies REAL ESTATE COMMISSION are still important considerations. Keep in mind Forms/Consumer/rec422.pdf. The purpose of this form materials containing asbestos. If present, these can pose of all repair/service invoices that have not already been P.O. Box 17100 • Raleigh, NC 27619-7100 that flood zone maps are updated periodically, so a is to give a seller the opportunity to disclose any known health and safety issues, so ask the seller to remedy these provided. As previously noted, closing usually constitutes Phone: 919/875-3700 • Website: www.ncrec.gov property’s location inside or outside a flood zone can defects present in the home. As a buyer, you should issues prior to closing. Also, be aware that historic homes a buyer’s acceptance of a property in its condition at the change. You can search for the property address on carefully review this form. If the seller answered “Yes” to may be subject to special zoning requirements. time of closing unless you and the seller have agreed 40,000 copies of this public document were printed FEMA.gov to view the most relevant flood map in the any question or failed to answer any question, ask for an otherwise in writing. It is therefore important that you are at a cost of $0.00 per copy. area. If the property is located in a flood zone, talk to explanation. Note that sellers have the right to make “no Q: What are some due diligence steps for buying an satisfied with the condition of the property at the time of your insurance agent about the cost of flood insurance. representation” on the Statement. unimproved lot or land? closing. REC 4.26 • 7/31/20 AA publicationpublication of the North Carolina Real Estate Commission Questions and Answers on: existing condition unless provision is otherwise made in VideoLibrary, and the Home Inspector Licensure Board Q: If the sellers or the sellers’ broker indicates • Survey system should determine if it is adequate to support the D U E D I L I G E N C E F O R writing.” So, you should address all repair issues and be fully website at https://ncdoi.com/osfm/Engineering_and_Codes/ that the agreed upon repairs have been completed, A survey is the process of locating and measuring a number of bedrooms in the property and is performing R E S I D E N T I A L B U Y E R S aware of the condition of the property before closing. You will HILB.aspx. may I have the home inspector perform a “re- property’s boundary lines to determine its borders, its properly. Repairs to these systems can be very expensive. likely be responsible for all repairs needed after the closing. inspection?” total area (i.e. acreage), the location of buildings and other Be sure to review a copy of the septic permit to confirm Q: Should I be present when an inspection is A: Yes. It is always a good idea to confirm that all agreed improvements to the property, and any encroachments, that the number of bedrooms specified on the permit Due diligence is a vital part of the home buying performed? upon repairs have been made properly and completely easements and setback violations. Some lenders require a meets or exceeds the actual number of bedrooms in the process. As a buyer, it is your opportunity to gather A: Yes, you (and your broker, if you have one) should be prior to the closing. You should be aware that some home survey; buyers are typically responsible for the cost. If your house. If the property is advertised as having “city water information about the property and surrounding area present so that the inspector can show you any problems inspectors charge a fee for re-inspections and that a re- lender will not require a survey, it is still wise to obtain one or city sewer,” ask for a copy of the sellers’ most recent to help you make an informed decision about whether found and discuss them with you. The home inspector must inspection is not a warranty of the repairs that have been before the end of the due diligence period to make sure utility bill and call the city or the utility provider if the bill this is the right home for your needs. Since purchasing a give you a written report of the results of the inspection. made. A broker who lacks the qualifications to evaluate the acreage and borders of the property match what you does not clearly indicate that the property has city water home is a large investment for most buyers, it is wise to the quality of a repair should refrain from evaluating were told, and so that you can resolve all encroachments, and/or sewer services. ask questions, review documents, and order inspections Q: What do I do after receiving the home inspection the repair. setback violations, or other issues prior to closing. The to reduce the risk of buying a home with serious and report? title insurance company may exclude from coverage any costly defects or with issues that could affect its value and A: Review the report carefully. Discuss your questions with Q: What other inspections and services should I problem shown on the survey that is not resolved before desirability. the home inspector and your real estate broker. You may consider? closing. A number of inspections are highly recommended Q: What kind of inspections do I need to find out then want to ask the seller to make repairs, renegotiate the A: Consider each of the following. as part of the due diligence process, even if they are not about the condition of the property? terms of the contract, or exercise your right to terminate it. • Appraisal required by a lender and even if a seller answers “No” to A: The most important inspection is usually a home Virtually all lenders will require you to pay for an appraisal every question on the “Residential Property and Owners’ inspection. You should order a home inspection even when a Q: How will I know if I need other inspections? of the property to determine if its market value meets Association Disclosure Statement.” As a homebuyer, you home is brand new or recently renovated. If a home has been A: Your home inspector may recommend further evaluation or exceeds the purchase price. [Note: Your loan amount are responsible for the costs of inspections and other renovated or has a room addition, check for building permits by a specialist such as licensed electrician, plumber, HVAC will be based upon the lesser of appraised value and sales • Radon services necessary to determine the condition of the that may have been required and ask for the qualifications technician, roofing contractor, structural engineer or price.] Review the appraisal report prior to the end of the Radon is a colorless, odorless, radioactive, carcinogenic property and to assess whether it meets your needs. The of the person(s) who made the renovations. Your real estate other professionals. And, you may want to consider other due diligence period to make sure that the value of the gas that can be found in the air and well water of homes inspection expenses are generally not recoverable if you broker can help you with this. inspections and services described here. If you decide you property, its square footage and features match what you all over the United States. Any home can have radon, choose not to proceed with the purchase. On the other want a specialized inspection, it would be wise for you were told by the seller or real estate brokers and what is regardless of its age, condition, or location. Have the hand, if you choose to forego available inspections in Q: What is a home inspection? to hire your own inspector rather than relying upon an • Wood-Destroying Insect Inspection (aka “termite shown in the purchase contract. If you intend to pay cash property tested to make sure that radon is at or below order to save money, you could be faced with expen- A: A home inspection is a general review of the systems inspector hired by the seller. inspection”) for a property (i.e., not obtain financing), consider ordering the EPA’s guidelines for an “acceptable” level. See www. sive repairs or other problems after the purchase. and components of a home (plumbing, electrical, HVAC, Wood-destroying insects usually include termites, powder an appraisal anyway, or asking your broker to prepare a ncradon.org for a map and additional resources on radon Your purchase contract may give you a limited structural, roof, etc.), performed by a person licensed by Q: How do repairs get made? post beetles, and carpenter bees. A licensed pest control comparative market analysis (“CMA”) to confirm that you in North Carolina. time to gather the information and documentation you the North Carolina Home Inspector Licensure Board. It A: With the assistance of your broker (if you have one), you operator can determine whether there is evidence of are not paying too much for the property. need. You should complete your due diligence by the is intended to give you an understanding of the home’s should decide which repairs are important to you. Prepare a a present or past infestation and whether the property • HVAC system deadline specified in your contract, and in enough time condition, including whether a repair is needed or whether written request clearly specifying which repairs you desire, has been previously treated for an infestation. A current • Wells and Sewage Disposal Systems As a buyer, you should strongly consider hiring a licensed for the seller to respond to any repair requests. You will further inspection by a specialist is recommended. You should how you want the repairs to be made, whether you want infestation will likely require treatment by a pest control If you are buying a property with a well and/or a septic HVAC technician to determine whether the HVAC system also want to have sufficient time to decide whether to ask the home inspector to inspect all the things that are licensed professionals to make the repairs, and whether you firm. If a wood-destroying insect infestation has been system (not city water or sewer), have the well and/ is functioning properly whenever a home inspector continue moving forward, attempt to renegotiate the important to you. Read carefully the written contract provided want to receive copies of written receipts for the repairs at or present (or was present) for a long period of time, there or septic system inspected prior to the end of the due recommends it. If the HVAC firm determines there is a contract, or terminate your contract. If you wish to by the home inspector to understand the services provided before the closing. The seller or seller’s broker will likely ask could be structural damage to the home which could diligence period. A well inspection and separate water problem, the buyer should ask the seller to hire a licensed extend your due diligence period, you may ask the seller and the cost. For more information about home inspections, for a copy of your home inspection report for confirmation warrant a structural inspection by an engineer or licensed quality test will determine whether there is an adequate HVAC firm to make any necessary repairs prior to closing. to do so, but the seller is under no obligation to agree. refer to the Commission’s brochure, “Questions and Answers of the repairs you request before agreeing to make repairs. general contractor as well as structural repairs. The pest amount of water and water pressure and if there are A re-inspection by your HVAC technician following Remember, most sales contracts state that “closing on: HOME INSPECTIONS”, the home inspection videos on The report belongs to you, and you may share it with them control operator will issue a written inspection report for any harmful contaminants (i.e. bacteria, heavy metals, any repairs would be wise to confirm the repairs were shall constitute acceptance of the property in its then the Commission’s website at https://www.ncrec.gov/Resources/ if you wish. you to sign acknowledging your receipt of it. pesticides, etc.) in the water. An examination of the septic properly made. Continued